2013 Global Gold Price Report Responsibly Optimistic Annually, Pwc Surveys Gold Mining Companies from Around the World

www.pwc.com/ca/goldsurvey

2013 Global Gold Price Report Responsibly optimistic Annually, PwC surveys gold mining companies from around the world. This year, we contacted executives from a cross-section of senior, mid-tier and junior gold mining companies representing 35 million ounces of gold mined in 2012 and 35 million ounces expected to be mined in 2013.

Inside 1 Survey participants 14 Interview with Randy Smallwood, President and CEO, Silver Wheaton Corporation 2 PwC’s point of view 17 Global silver price survey responses 4 Gold price performance 18 Deals activity in 2012 6 Interview with Jamie Sokalsky, President and CEO, Barrick Gold Corporation 20 Gold deal activity 8 Gold miners’ cash allocation and capital 22 Mining in South Africa — 2013 outlook investment strategies Back Contact information 10 Mine planning data ii Global gold price Global silver price survey participants survey participants We would like to thank the senior executives from the companies We would like to thank the senior executives listed below for participating in our Global Gold Price Survey. from the companies listed below for participating in our Global Silver Price Survey.

Agnico-Eagle Mines Ltd McEwen Mining Inc Coeur d’Alene Mines Corp Amara Mining plc Midway Gold Corp Endeavour Silver Corp B2Gold Corp New Gold Inc First Majestic Silver Corp Barrick Gold Corp Newmont Mining Corp Fortuna Silver Mines Inc Caledonia Mining Corp Northern Star Mining Corp Great Panther Silver Ltd Cerro Grande Mining Corp OceanaGold Corp Impact Silver Corp Centerra Gold Inc Orvana Minerals Corp Pan American Silver Corp Coeur d’Alene Mines Corp Osisko Mining Corp Silver Standard Resources Inc First Majestic Silver Corp Pan American Goldfields Ltd Silvercorp Metals Inc Franco-Nevada Corp Primero Mining Corp South American Silver Corp Goldcorp Inc Regis Resources Ltd US Silver & Gold Inc Golden Band Resources Inc San Gold Corp Gran Colombia Gold Corp Scorpio Mining Corp IAMGOLD Corp Silvermet Inc Kingsgate Consolidated Ltd Solitario Exploration & Royalty Corp Kinross Gold Corp St Andrew Goldfields Ltd Kirkland Lake Gold Inc US Silver & Gold Inc Kumtor Gold Company Vatukoula Gold Mines plc Latin American Minerals Inc Wesdome Gold Mines Ltd Luna Gold Corp Yamana Gold Inc

1 PwC point of view

Reached breaking point ... first to rally

Gold equities reached their breaking point felt the pressure diversified miners have in 2012, having their stock prices severely to immediately defer projects and slash punished by disappointed shareholders. capital expenditure budgets. In the past few years we’ve seen gold In 2012, diversified miners announced mining CEOs spend billions of dollars on well over $65 billion in deferred capital risky acquisitions and capital intensive expenditures. Meanwhile, the markets did development projects in an attempt to not see the same level of pull-back from appease shareholders pleas for greater gold miners. In Q2 2012, Barrick Gold exposure to gold during the commodity’s announced that they plan to defer $3 billion steady ascent in price. Many gold companies, in capital expenditures budgeted over a however, weren’t able to build projects on four year period. Then in Q3 2012, Barrick time or on budget — failing to generate the announced they will defer $1 billion in capital value shareholders were hoping for. expenditures in 2013, spreading the cuts In the summer of 2012, CEOs of two of the across their mines, stating this decision will world’s largest gold companies, Barrick Gold have no material impact on production. As and Kinross Gold, were dismissed from their opposed to the significant halts in project positions. Boards started to institute change development, weighing heavy on some of the and wanted to prove to investors how serious world’s largest diversified miners, gold miners they were about a change in direction. have been able to push projects forward with Switching from a strategy focused on the the caveat they will get very serious about top-line, we’ve seen gold companies get more cracking down on costs. focused on the bottom-line — specifically In Q2 2012, Kinross launched a cost “free cash-flow” per ounce. reduction initiative, with the objective of After a flood of headlines chastising gold reducing capital and operating costs across companies… they are starting to rally. all operations and development projects. Morgan Stanley declared the favored This strategy is being embraced by many commodity in 2013 to be gold, suggesting gold miners and not just the senior gold the conditions backing a bull-run in miners. This summer, Lake Shore Gold gold largely remain the same — weaker announced they’re on track with their cost US dollar, Central Bank buying, ETF savings plan and expect to still achieve their demand and recovery in Indian demand. 2012 production targets. In our survey, we Consistently high gold prices have meant asked executives if they see a divergence that while gold companies have cut back between the price of gold and their stock on certain capital spending they have not price and, if so, how they plan to narrow

2 the divergence in 2013 — 60% cited instituting cost management programs as their strategy to narrow the gap. Increasing dividends was the second most common solution disclosed. Senior gold miners also boast strong cash positions. An analysis of 46 of the largest TSX listed gold mining companies showed that more than half — 26 in total — have cash reserves greater than $500 million. While we do not expect a flurry of deals in the gold mining space, with only 31% of survey respondents expecting to use their cash in 2013 on acquisition activity, the strong cash position of these senior gold miners allows them the ability to acquire promising junior miners for cash if the opportunity strikes. It also means they have the ability to increase dividend payments to shareholders. Of the seniors who responded to our survey, 100% reported they will use their cash in 2013 to pay a dividend — with 80% of them stating they plan to increase their dividend in 2013. Overall, we believe gold miners are well positioned for a promising 2013. Gold mining executives are serious about proving to the market they are once again a good investment — not just for the short-term, but for the long-term. Winning over investors’ hearts will involve establishing effective cost management strategies, increasing dividend payments and investing responsibly John Gravelle, Tim Goldsmith, in production growth — all on the back of a Mining Leader for the Americas Global Mining Leader strong gold price. PwC PwC

3 Gold price performance

Favored commodity in 2013

This year, gold executives are more optimistic in the price of gold. Executives of some of about the price of gold than they were last the largest gold companies expect to see year. Eighty-eight percent of executives the price of gold climb beyond $2,000 in believe we will see a rise in the price of 2013. A survey completed in November by gold, with zero expecting to see a decline Bloomberg showed, on average, analysts too are optimistic about gold — forecasting prices to remain just slightly under $2,000 at $1,925 Where do you see the price of gold within the next 12 months? per ounce in Q4 2013. 100% Increase Gold’s price run, on an annual basis, has 83% lasted for more than a decade, and judging by the long-term gold price companies will Decrease 0% 0% be using in their mine planning, they believe 17% strong gold prices will be here for awhile Stay the same longer. The average long-term price of gold 0% used by gold miners has increased 6% from 0 20 40 60 80 100 last year and 29% from 2 years ago to $1,400 per ounce. Seniors Juniors and mid-tiers

What gold price are you using in your mine planning? 1,600 1,500 1,400 1,300 1,200 1,100 1,000 900 2013 2014 2015 Long-term Average 2013 Average 2012 Average 2011

What gold price are you applying to your reserves in 2012? (Individual responses) 1,600 1,500 1,400 1,300 1,200 1,100 1,000 900

4 Senior and mid-tier stock gold eked up in price. But mid-tiers were performance compared to gold much more volatile than the seniors, often — who did better? performing opposite to that of the ebbs and flows in the price of gold. In 2012, the In 2012, the average price of gold is 91% percent change between the averaged high higher than in 2008. During this same time and low in stock performance for senior frame, on average the stock price of the miners was 49% and 67% for mid-tiers. world’s top ten gold miners inched-up 15%. Looking at a window of five years this Mid-tier gold miners, however, experienced volatility is consistent each year. What this an increase of 127%. The volatility of senior indicates is that the diversification, which gold miners’ stock price tracked much naturally comes with being a large gold closer to that of gold — moving lower when producer, generates benefits in the form of gold hit a bump and crawling higher when lower volatility.

% change between 52 week high and 52 week low

2008 2009 2010 2011 2012-Nov 30

Seniors 66% 67% 48% 45% 49%

Mid-tiers 89% 91% 85% 64% 67%

Average % change in stock price and gold price

50.00 40.00 30.00 20.00 10.00 0.00 (10.00) (20.00) (30.00) (40.00)

2008 2009 2010 2011 2012 Mid-tiers Seniors Gold

5 Interview with Jamie Sokalsky President and CEO, Barrick Gold Corporation

Big bets on the bottom-line

Project cost over-runs. Delays and missed deadlines. Lower than expected production. These are the headlines that have dominated the mining industry recently, translating into a common investor sentiment that many miners have simply not been disciplined enough with investment over the past several years. Many investors have lost faith that their returns will be re-invested in high returning assets, so they are turning to mining companies and saying “I want it, and I want it now”. Give me my returns, in the form of dividends or share buy backs, or I will invest my money somewhere else. Recently, PwC mining partners Serge Gattesco and James Lusby sat down with Jamie Sokalsky, CEO of Barrick Gold, to discuss shifts in investor thinking and how the gold industry is responding.

6 “If we look back two, three, four years ago, “Our message is that Barrick’s approach is And Jamie expects just that to happen. many investors’ focus was on increasing gold not just a harvest type strategy — that we do Stating the long-term trend for the price production. They rewarded miners who need to reinvest in the business, but we have of gold is up, and we could see prices in touted significant production growth. And for to reinvest at attractive rates of returns, it is excess of $2,000 and higher within a year the most part, shareholders ended-up getting not okay just to invest to generate greater or so. “We don’t just want to appeal to gold a lot of what they asked for — miners making ounces. Barrick is focused on bottom-line bugs excited about the price of gold,” says investments to grow production for the sake growth on a per share basis. If we can control Jamie. “We want to attract investment flows of production growth,” says Jamie. But the our operating and capital costs, generate because we run the business well and that industry wasn’t disciplined enough and higher quality ounces and make higher won’t happen if we misallocate capital.” many investors were left disappointed with returns on investment — even if that means Investors are also placing increased mine performance and investment returns. not growing our ounces produced — then importance on social responsibility, “I think the gold industry has gone through that’s what our strategy should focus on,” rewarding companies who have strong a bit of sea-change. Now, miners are more says Jamie. corporate social responsibility (CSR) policies. focused on the bottom-line. The industry Investors want exposure to the strong price “Ultimately, it is not just about doing the right overall is becoming a lot more disciplined in of gold without the risks mining companies things from a socially responsible standpoint, terms of the capital we are spending,” shares face. As a result, gold exchange traded it is about good business. When investors Jamie. This shift in business strategy from funds (ETFs) and gold streaming companies see that we’re trying to do things right one focused predominantly on increasing have notably attracted the attention of from a government relations, community production to a strategy focused on increasing said investors. “We have seen a gradual relations, and environmental standpoint it’s the rate of return on each ounce produced is increase in gold ETFs. Even in the phase of a competitive advantage — especially when mining executives’ way of proving to investors fairly significant sell offs in the gold price operating in more challenging countries”, they are buckling down, being disciplined there hasn’t been wholesale selling. To me, says Jamie. The industry has seen many and focusing on the bottom-line not the top- that indicates that these are primarily core instances where miners haven’t been able line. Jamie emphasizes this stating, “There investments for certain investors as part of to move investments ahead because of is much more focus now on free cash-flow their portfolio. As gold is viewed as more and government and community resistance. This per ounce than there is on operating cash- more like a currency and core to a portfolio has a significant negative impact on miners’ flow margins. Shareholders aren’t as focused for individuals and other institutions, ETFs stock performance. I believe the importance on operating cash-flow margin as they are won’t end up being a bubble,” shares Jamie. investors place on an effective CSR strategy on real cash generated from the business.” “As a gold industry we need to recognize will only continue to increase,” states Jamie. Barrick’s strategy of being more focused on there is increased competition not just from This increased emphasis on CSR will bode returns and free cash-flow is resonating with other gold miners, but with other gold well for mining companies and investors. investors and is being embraced by other investment opportunities like ETFs that tout companies in the industry. So, while investors remain drawn to gold, protection from mining risks such as strikes, they are disappointed with gold miners. With notable pressure on mining executives resource nationalism, and cost overruns.” To attract investor capital, Barrick is to turn their backs on low return investments, Jamie argues that, increased discipline needs concentrating on two key metrics: free cash- investors can expect to reap the rewards of a to be mining executives selling proposition in flow per ounce and risk adjusted returns more disciplined capital allocation strategy order to bring investment back to gold mining on capital. Returns will drive production. down the road. Results won’t be noticed companies. Jamie emphasizes this stating, Production will not drive returns. overnight. The damage that has already been “Our focus is on disciplined capital allocation done must be undone or compensated for and running the business well to compete before significant benefits are enjoyed. against a multitude of general businesses, and then when the gold price goes up gold miners should hit a home run”.

7 Gold miners’ cash allocation and capital investment strategies

“Big mining companies How did gold miners use How will gold miners use may be pulling back on their cash in 2012? their cash in 2013? major new spending plans, Dividends Dividends but they haven’t let up on Seniors: 100% said they used cash to pay Seniors: 100% will use cash to continue to exploration budgets… the dividends pay dividends — with 80% saying they plan junior market is very dead Juniors/Mid-tiers: 20% used cash to pay to increase the proportion of profits paid as a dividends dividend. — most drilling proposals Juniors/Mid-tiers: 28% now plan to use for the 2013 calendar year Project development and their cash to pay dividends — of the 28% are coming from senior exploration spend planning to offer their shareholders a Seniors: 100% used cash for both project dividend, half plan to increase the proportion miners, intermediaries and development and exploration activity of profits paid as a dividend. some very well-funded Juniors/Mid-tiers: 92% used cash for project Project development and juniors. development and 83% exploration activity exploration spend Francis McGuire,” CEO, Major Acquisitions Seniors: 100% will use cash for both project development and exploration activity Drilling Group International Inc. Seniors: 20% spent money on acquisition Globe and Mail related activity Juniors/Mid-tiers: 89% will use cash for project development and 83% will use cash November 28, 2012 Juniors/Mid-tiers: 14% spent money on to fund exploration activity acquisition related activity Acquisitions Seniors: Similar to 2012, only 20% plan to spend money on acquisition related activity In 2012, how did you use your cash? In 2013, how will you use your cash? Juniors/Mid-tiers: 33% plan to spend Paying 100% Paying 100% money on acquisition related activity — this dividends dividends 22% 28% is double the number of companies that spent money on M&A activity in 2012 Share 0% Share 0% repurchase 8% repurchase 6%

20% 20% Acquisitions Acquisitions 14% 33%

Project 100% Project 100% development development 92% 89%

Exploration 100% Exploration 100% spend 83% spend 83%

Seniors Juniors and mid-tiers Seniors Juniors and mid-tiers

8 How will gold miners’ capital investment programs change over the next 12 months?

With only 20% of senior gold miners looking with equity financing, and 11% will If you are anticipating getting financing to increase capital investment, it is no hope to secure off-take agreements or in 2013, what sources of funding are you surprise that 80% of senior gold miners said streaming deals. The companies who considering? (Select all that apply) they will not be pursuing additional sources responded aren’t considering buying of funding in 2013. Of the 20% of senior other companies to acquire cash, nor No financing 80% anticipated miners looking for additional financing in are they interested in selling-off a 28% 2013, most of them noted they will turn to piece of their project via royalties. 0% the equity markets for funding. Debt/project financing 61% The juniors and mid-tiers, however, reported more aggressive growth plans 20% Equity that will require significant financing for 36% said projects to see the light of day. As a result, only 28% of junior and mid- Streaming/ 0% off-take 11% tier gold miners stated they will not agreements pursue additional sources of funding 0% in 2013. Of those looking for funding, 61% will be looking for debt to fund their projects, 36% will try their luck Seniors Juniors and mid-tiers * None of the survey participants Seniors Juniors/Mid-tiers selected royalties or acquisitions as an option for financing in 2013 61%

40% 40%

31%

20%

Increased level Same level of Reduced level Increased level Same level of Reduced level of investment investment of investment of investment investment of investment

9 Mine planning data

How will your cash costs change during the What are the key drivers for the change, if any, in your cash costs? next 12 months? (Select all that apply)

Response Moderately Lower Wage Inflation 52% higher 33% Input/commodity prices 38% 39% Cost of production 43% Lower/higher cost mines coming into the production mix 26% Sequencing of mining activities impacting mining grades 36% Other 14%

Same 28%

How do you expect your long-term How do you plan to replace reserves? (Select all that apply) productivity levels to change?

Stay the same 74% 5% Organic brownfield 67% exploration 78%

57% Acquisitions Increase 40% 95% 37%

48% Organic greenfield exploration 48% 54%

19% Lower cutt-off grade 15% 15%

6% Other 2% 0%

2010 2011 2012

10 What foreign exchange rate do you use for the following currencies in your mine planning?

Year US$: Canadian US$: Australian US$: South African Rand

2011 1.01 0.97 7.1

2012 1.00 1.00 8.00

11 Will you disclose exchange rates in your annual financial reporting Will you disclose gold price assumptions related to reserves in your this year? annual financial reporting this year?

69% Yes No 46% 54% 31%

Yes No

Will you disclose gold price assumptions related to mine planning Do you expect to disclose the sensitivity of reserves to price in your annual financial reporting this year? assumption changes in your annual financial reporting this year?

No 60% Yes No 31% 69% Yes 40%

Do you use derivatives or future sales contracts to lock in the future If yes, were these imposed as a condition of financing? price of gold sales? 73% No

Yes 27% 19% 81% Yes No

12 13 Interview with Randy Smallwood President and CEO, Silver Wheaton Corporation Grass is greener on our side of the fence

Silver was the best performing precious metal in 2012, with prices having risen by 20% as of mid November. But many miners and industry analysts believe the best is yet to come. In this PwC conducted survey of senior global silver mining companies, 75% of respondents stated they believe the price of silver will increase in 2013 or the same. Randy Smallwood, President and CEO of the world’s largest metals streaming company, Silver Wheaton, was recently quoted saying, “It’s a rising market. Silver has already outperformed gold this year and I think that will continue for awhile. Gold will do well, silver will just do better. I expect to see silver hit US$40 in the next few months, with the possibility of silver reaching US$50 in 2013.” Michael Cinnamond, mining partner at PwC, recently met-up with Randy to discuss why he is so bullish on silver — specifically what’s driving the price of silver and what makes streaming such an attractive business model.

14 “It is a very exciting time for silver, and I 50.00 believe the long-term fundamentals for silver 40.00 are strong. It’s not that we don’t like gold; 30.00 we just see greater opportunity in the silver space,” says Randy. Silver Wheaton doesn’t 20.00 have any gold streams, but they do have 10.00 precious metals streams that involve gold. 0.00 “When questioned by the industry if we will (10.00) branch-off to include gold streams in our (20.00) portfolio, I have to say it is a case of whenever I look over the fence at the gold streaming (30.00) space I find the grass is greener on my side Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov of the fence,” says Randy with a shrug of his Silver (COMEX:^GC) – Day Close Price Silver Wheaton Corp. (TSX:SLW) – Share Pricing shoulders. Seventy percent of worldwide silver production is produced as a by-product. silver is brought into play. “It is the formidable Yet silver is often pegged as volatile, causing That means it is produced by companies that combination of weight and efficiency that many investors with weak stomachs to shy aren’t all that interested in silver; whereas, makes silver so attractive. And because we away from the metal. “Yes, silver is definitely only 10% of gold is produced as a by-product. are talking about a very minuscule amount of more volatile than gold, but volatility can be “Currently in the gold streaming space silver being used in these products, to a large a good thing,” says Randy. “The copper, lead, you have two well established companies, degree they are insensitive to the price of zinc and gold miners who have silver in their Franco-Nevada and Royal Gold, with silver,” says Randy. mines don’t change their production plans Sandstorm Gold nipping at their heels”, as Then there is the growing demand for energy based on the price of silver. They are not their CEO Nolan Watson put it, competing that is contributing to the attractiveness of going to expand production or move forward for those gold streams. silver. “If you can get solar energy to the point with a project because silver has increased in “There is a lot of competition in the gold where it is cost competitive without subsidies, price and as a result”, Randy explains, “you space; we don’t see the same level of solar panels will take-off , bringing silver with get this natural restriction on the supply side competition in silver,” shares Randy. “We it,” says Randy. Being the best conductor of that isn’t there to counter-balance demand. see more opportunities in silver and less electricity, silver is used as an energy interface That is why silver is more volatile than gold competition, so we will stay silver focused.” in high efficient solar panels. “As other energy and in a rising market it means silver should That being said, if there isn’t enough value sources get more expensive — and they will outperform gold.” in a mining company’s silver production and over time because most of them are drawn There is more to Silver Wheaton’s success they need more capital Silver Wheaton is from non-renewable resources — solar than just a rising silver price and strong long- not opposed to bringing on some gold to get energy will be more and more competitive.” term fundamentals for silver. Randy shared to the right value equation. We recently saw One interesting growth area for silver that has with us the ‘secret sauce’ used by streaming this play out with the deal Silver Wheaton recently taken off is its use in anti-bacterial companies, the magic behind what makes struck with Hudbay Minerals in August. products. “That is why ancient civilizations the streaming business model so attractive to Silver Wheaton acquired 100% of the life drank water from silver chalices and investors. “There is frustration in the market of mine silver production from Hudbay’s vessels; silver has very strong anti-bacterial regarding the poor track record mining Constancia project and 777 Mine, with an qualities,” says Randy. Now silver is being companies have in terms of delivering on agreement to acquire 100% of the life of mine incorporated into everything from bandages, acquisitions and capital budgets. That is one gold production at 777 Mine until either to undergarments worn by US Armed Forces, of the reasons mining companies are at the Constancia satisfies a completion test or the to surgical instruments to decrease the risk equity prices they are right now and one end of 2016, at which point the gold stream of infection. “So you have a core base of of the things that differentiates streaming will be reduced to 50%. silver consumption that accounts for half companies from a typical mining company,” But there is more to Randy’s bullish belief in of the world’s silver production. The other says Randy. Streaming takes out those cost silver than the fact 70% of silver is produced 400 million ounces produced in a year is risks so there are no surprises. When you are as a by-product. He believes many factors consumed by investor demand. This split is investing in a mining company, the margin are pointing to strong growth potential for very different from that of gold. Only 5% of is what you are investing into and if costs silver. “Let’s talk about the consumption gold is used for industrial purposes and the are climbing at the same rate as commodity side of things. When you go down the list of rest of demand is driven by investors,” states prices there is no real net gain. The huge where silver is being consumed it is generally Randy. “The fact that a substantial amount advantage of streaming is that costs are fixed. the growing technologies that are the big of silver is consumed gives me comfort in the “We don’t have a cost curve, we have a cost consumers of silver,” says Randy. Silver is long-term value of silver; there will always be line and it is essentially a flat, straight line,” the best conductor of electricity. The more a core demand.” says Randy. powerful, lighter and efficient we want electronics, such as smartphones, the more

15 30.00 Of course there are still risks associated with 25.00 the streaming business model — there’s no free lunch in life. Mining executives of 20.00 streaming companies need to carefully invest 15.00 in just the right mining projects. If one of their mining partners suffers a significant hiccup in 10.00 production, they’ll be impacted. A streaming 5.00 company is also exposed to the price of the 0.00 commodity they stream, which is great when the market is optimistic, but challenging (5.00) when prices take a turn for the worse. “We (10.00) focus on long-term value — trying to dictate where we see silver years out, not worrying (15.00) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov over the daily ebbs and flows in the silver price,” says Randy. “Our concern is providing Gold (COMEX:^GC) – Day Close Price Silver (COMEX:^SI) – Day Close Price access to good quality silver production. Ensuring the companies we invest in are You might argue that ETFs accomplish a equipped with strong management teams similar result — providing investors the capable of running high quality mine projects exposure to silver prices without having to is very important to us.” deal with the risks mining companies face. Hailed by Fortune Magazine as 2012’s Comparing the strengths of the streaming fastest growing company, we are excited to business model to that of ETFs just happens see where Randy and his team take Silver to be one of Randy’s favorite topics of Wheaton in 2013. Silver Wheaton is busy, discussion. “I always like discussing how with its current portfolio growing production streaming compares to ETFs, because I from 28 million ounces to 48 million think the streaming model performs so well ounces by 2016, and the current financial compared to an ETF,” says Randy with an climate providing plenty of opportunity for air of confidence in his voice. “We provide additional growth. The question is, after investors leverage by virtue of our base outperforming silver for the majority of 2012, cost, we provide organic growth via the will Silver Wheaton be able to continue on exploration success of the mines we have this upward trend? Time will tell, but the invested in, we provide acquisition growth, current challenging financing conditions will and of course, we provide yield — doing definitely play to Silver Wheaton’s favor. all of this for about half the fees of an ETF. The streaming business model allows us to capitalize on the upside of mining, mitigating cost risks typically associated with traditional mining companies, while still being able to provide our investors with growth and yield.”

16 Global silver price survey results

How do silver miners plan on using their How have silver miners’ capital investment cash? (Select all that apply) programs changed over the last 12 months? $25.10 is the

Reduced Project 100% average silver development level of 100% investment Increased 22% level of 87.5% price miners will Exploration investment spend 87.5% 33%

25% apply to their Share repurchase 25% Same level of reserves in 2012. 25% investment Acquisitions 45% 25%

Paying 12.5% dividends 12.5%

Other 12.5% 12.5%

2013 2012

How will silver miners cash costs change How do silver miners expect their long-term during the next 12 months? production levels to change?

Lower 0% Same 12% Same 14% Moderately 57% higher Significantly 29% Decrease Increase higher 25% 63%

17 Deals activity in 2012

Silver deals

2012 Silver deals

Volume Value (US$ millions) Average value (US$ millions)

Silver buyers of silver targets 14 $2,180 $273

Non-silver buyers of silver targets 43 $533 $21

Silver deals Average premium

Silver buyers of silver targets 37%

Non-silver buyers of silver targets 23%

Most active silver targets

Country Volume Value (US$ millions)

Canada 20 $1,688

Peru 6 $303

Mexico 6 $285

Canada was the most active silver buyer completing 27 deals valued at US$2.25 billion.

18 Gold deals China still keen to acquire China is keen on gold for two main reasons: gold mines • The life of mine for China’s gold mines is In 2011, four of the top gold deals low. To ensure they have secure access to gold in the future China is looking at were acquired by Chinese buyers, promising gold acquisitions abroad. demonstrating China’s strong • The Chinese Central bank has increased its appetite for gold. In 2012, China gold held. Thus, it is expected to support again was responsible for four out of state-owned entities acquiring additional the top twenty gold deals announced. gold assets both in China and abroad.

Most active gold buyers Most active gold targets

Country Volume Value (US$ million) Country Volume Value (US$ million)

Canada 243 $4,797 Canada 185 $4,922

China 28 $2,348 Australia 84 $3,202

Australia 97 $1,682 China 26 $1,874

2012 Gold Deals

Volume Value (US$ millions) Average value (US$ millions) Average premium

Gold buyers of gold targets 255 $8,832 $52 34%

Non-gold buyers of gold targets 322 $5,816 $30 16%

19 Top 20 Gold Deals of 2012

Announced Target/Issuer Transaction Transaction Buyers/Investors Buyer Industry Target Target Buyer Headquarters Target Stock Premium Buyer Resource Locations Target Resource Date Status Value (US$mm) Industry Headquarters — 1 Month Prior (%) Locations

12/18/2011 European Goldfields Ltd Closed 2,347.91 Eldorado Gold Corp. Gold Gold Canada Canada 43.12 Greece, Turkey, Brazil, China Greece, Romania, Turkey

09/19/2012 CGA Mining Ltd. Announced 1,195.79 B2Gold Corp. Gold Gold Australia Canada 46.88 Nicaragua, Colombia, Uruguay, Namibia Philippines

11/23/2011 Joint Stock Company Polymetal Closed 1,123.91 PMTL Holding Ltd. — Gold Russia Cyprus 6.06 Russia Russia, Kazakhstan

10/09/2012 AuRico Gold de México, S.A. de C.V. Closed 750.0 Minera Frisco, S.A.B. de C.V. Diversified Metals Gold Mexico Mexico — Mexico Mexico and Mining

06/29/2012 Allied Gold Mining PLC Closed 650.4 ST Barbara Ltd. Gold Gold Australia Australia 81.19 Australia Papua New Guinea, Solomon Islands

07/13/2012 La Mancha Resources, Inc. Closed 493.24 Weather Investments II S.à.r.l. Asset Management Gold Canada Luxembourg 48.31 N/A Côte d’Ivoire, Sudan, and Custody Banks Argentina, Australia

06/01/2012 Shandong Shengda Mining Co., Ltd. Closed 475.36 Shandong Gold Group Co., Ltd. Gold Gold China China — China China

08/06/2012 Integra Mining Ltd. Announced 457.54 Silver Lake Resources Ltd. Gold Gold Australia Australia 25.62 Australia Australia

06/18/2012 Extorre Gold Mines Ltd. Closed 444.52 Yamana Gold, Inc. Gold Gold Canada Canada 64.63 Argentina, Brazil, Chile, Mexico Argentina

08/07/2012 Avion Gold Corp, Closed 433.81 Endeavour Mining Corp. Gold Gold Canada Cayman Islands 53.82 Ghana, Burkina Faso, Côte d’Ivoire Mali, Burkina Faso

04/30/2012 Polyus Gold International Ltd. Closed 424.5 Chengdong Investment Corp. Asset Management Gold United Kingdom China (9.0) N/A Russia, Kazakhstan, and Custody Banks Romania, Kyrgyzstan, Irkutsk, Republic of Sakha, Magadan

05/23/2012 Gansu Daye Geological Mining Co., Ltd. Closed 404.99 Zhejiang Gangtai Holding (Group) Real Estate Gold China China — N/A China Co., Ltd. Development

06/08/2012 JSC Kazakhaltyn MMC Announced 380.0 AltynGroup Kazakhstan LLP Gold Gold Kazakhstan Kazakhstan — Kazakhstan Kazakhstan

07/18/2012 High River Gold Mines Ltd. Closed 294.39 Nord Gold N.V. Gold Gold Canada Netherlands 11.6 Russia, Kazakhstan, Guinea, Russia, Burkina Faso Burkina Faso

02/23/2012 Chifeng Jilong Mining Ltd. Closed 253.47 Guangdong Oriental Brothers Construction and Gold China China — N/A China Investment Co.,Ltd. Farm Machinery and Heavy Trucks

08/27/2012 Inter Citic Minerals Inc. Closed 251.51 Western Mining Co. Group, Ltd. Diversified Metals Gold Canada China 34.9 China China and Mining

05/29/2012 Mineração Serra Grande S/A Closed 220.0 AngloGold Ashanti Brasil Gold Gold Brazil Brazil — Brazil Brazil Mineracao Ltda.

04/30/2012 Polyus Gold International Ltd. Closed 210.99 VTB Bank Diversified Banks Gold United Kingdom Russia (10.3) N/A Russia, Kazakhstan, Romania, Kyrgyzstan, Irkutsk, Republic of Sakha, Magadan

04/03/2012 Norton Gold Fields Ltd. Closed 205.55 Jinyu (H.K.) International Gold Gold Australia Hong Kong 35.1 China Australia Mining Company Ltd.

11/08/2011 Long Province Resources Ltd. Closed 180.76 Ding Jin Ltd. Gold Gold China British Virgin Islands — China China

20 Announced Target/Issuer Transaction Transaction Buyers/Investors Buyer Industry Target Target Buyer Headquarters Target Stock Premium Buyer Resource Locations Target Resource Date Status Value (US$mm) Industry Headquarters — 1 Month Prior (%) Locations